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SNAFU MARKS MORE TROUBLE FOR NASDAQ — Thetechnical glitch that brought trading to a halt on the Nasdaq for more than three hours Thursday is causing alarm in Washington, where regulators have been pushing for rules that would mandate basic technology upgrades at exchanges. There’s no definitive explanation for what caused the outage — Nasdaq attributed it to a problem with a feed that distributes price quotes — but one thing is clear: Washington wants answers. SEC Chairwoman Mary Jo White is already talking about a gathering with leaders from the exchanges, and SEC Commissioner Luis Aguilar added he was in discussions with staff all day.

POLITICO’s Zachary Warmbrodt has more: “While the economic damage of the outage appeared minimal — stocks actually climbed by Thursday’s close — it’s another black eye for Nasdaq, which botched last year’s high-profile public offering for Facebook. It also raises big questions about the technological stability of stock exchanges more than three years after a glitch triggered the so-called flash crash that shaved nearly 1,000 points off the Dow Jones Industrial Average in just a few minutes.

“‘The knee-jerk reaction is the financial services committees in the Congress and Senate will look at this and say, “You’ve got to fix it and protect the investing public” — the usual pitchforks and torches,’ said John Rapa, president and chief executive of management consulting firm Tellefsen and Company.” http://politi.co/14ntHOP

BAIR’S YELLEN COMMENTS RAISE EYEBROWS — Yesterday, M.M. ran a snippet from our conversation with Sheila Bair about the Fed chair nomination. The former FDIC chairman said Fed Vice Chairman Janet Yellen’s qualifications should have nothing to do with the fact that she is a woman, before adding: “Others who do come from Wall Street or have gone back and forth there will reinforce the public cynicism that I worry about. But she does not have that. And it would be a good tribute to those who choose to spend most of their time in public service.”

This seemed to strike some as hypocritical. One financial services executive said in an email to M.M.: “I was a little surprised by the quote about Wall Street and cynicism that led today’s M.M. column. Was it really from Sheila Bair? Because I remember that the top lobbyist for the NYSE in the 1990s was ... you guessed it ... Sheila Bair. ... Not only was the NYSE ‘Wall Street,’ it was Wall Street at its worst, as evidenced by numerous cronyism and pay scandals that led to CEO Richard Grasso’s ouster around 2003.”

OBAMA TURNS FOCUS TO COLLEGE AFFORDABILITY — President Barack Obama on Thursday rolled out a new proposal to make college education more affordable to average Americans. POLITICO’s Libby Nelson and Jennifer Epstein have the full story: “Under the plan he’d like to see Congress approve, ‘colleges that keep their tuition down and are providing high-quality education are the ones that are going to see their taxpayer funding go up. It is time to stop subsidizing schools that are not producing good results and reward schools that deliver for American students and our future.’ ...

“Without waiting for congressional approval — though, aides said, with lawmakers’ input — Obama will direct the Education Department to create a rating system for colleges and will push for reforms aimed at making college more affordable and accessible, particularly for nontraditional students.” http://politi.co/13IV47u

WHERE ARE ALL THE GOOD JOBS? – Most Americans are not convinced that there are many of them out there. According to Gallup’s latest survey, just 21 percent of Americans think now is a good time to find a quality job — the most negative reading of 2013 and down from 25 percent last month. About three in four people, 76 percent, say it is currently a bad time to find a good job.

More from Gallup’s Elizabeth Mendes: “Prior to this month, Americans’ views of the availability of quality jobs, though still generally pessimistic, had been improving. The percentage saying now is a good time to find quality work rose through most of 2012 and increased further in 2013. But that momentum appears to be fading. ... Americans’ quality jobs outlook has worsened at the same time that their confidence in the economy has declined and the U.S. Payroll to Population employment rate has been stagnant.” http://bit.ly/1bX60i8

THIS MORNING ON POLITICO PRO FINANCE — POLITICO’s Kate Davidson sits down with Holly Petraeus to discuss the work that she’s doing at the CFPB ... To learn more about Pro's subscriber-only coverage — and to get Morning Money every day before 6 a.m. — please contact Pro Services at (703) 341-4600 or info@politicopro.com.

M.M. NEXT WEEK – A quick reminder that while most of our morning newsletters will go dark next week, M.M. will NOT be taking a break. So please keep tuning in bright and early!

DRIVING THE DAY — Obama continues the second day of his two-day bus tour to discuss affordable education. He has a town hall at Binghamton University, the State University of New York, and will speak at Lackawanna College in Scranton, Pennsylvania. ... Fed Vice Chair Janet Yellen chairs a panel at the Fed’s annual symposium in Jackson Hole, hosted by the Kansas City Fed. ... New home sales at 10 a.m. ...

**A message from FEAI, the Financial Education and Advocacy Initiative: Thank you to the credit unions that have remained faithful to your core mission. For those that have grown beyond recognition, but still wish to have taxpayers subsidize you @ItsTime2Pay: https://twitter.com/ItsTime2Pay **

BITCOIN’S WASHINGTON PROBLEM — POLITICO’s Andrea Drusch: “On paper, the popular virtual currency Bitcoin is the type of entity that traditionally would hire a powerful K Street lobbying firm to protect its interests in Washington, especially in the cutthroat world of financial regulations. But Bitcoin doesn’t exist on paper.

“With no public founder or organization behind it, Bitcoin isn’t in a strong position to defend itself from government scrutiny or lobby Congress on critical issues including privacy. As a fully decentralized network, the closest thing Bitcoin has to formal representatives are exchanges that facilitate the buying and selling of Bitcoins against other currency, and trade associations that represent them. Those groups are just learning the ropes.” http://politi.co/12u0Ua4

“It took a great recession to change his mind. The recession, prompted by the collapse of the housing bubble that Mr. Bernanke — and most other experts — failed to see coming, ended an era of minimalism in central banking. And there is no better marker than the views of Mr. Bernanke, the world’s most influential central banker, who now argues that the Fed needs to consider a range of previously unthinkable actions, including trying to pop bubbles when necessary, because sometimes the cost of doing nothing is worse.

“Mr. Bernanke, who plans to step down in January after eight years as Fed chairman, will be remembered for helping to arrest the collapse of the financial system in 2008. This shy, methodical economist who had been expected to serve as the keeper of Alan Greenspan’s flame — to preserve the Fed’s hard-won success in moderating inflation — emerged under pressure as perhaps the most innovative and daring leader in the Fed’s history.” http://nyti.ms/1d66LJA

BERNANKE’S CONSPICUOUS ABSENCE — CNBC’s Steve Liesman in Jackson Hole, Wyo.: “The absence of Ben Bernanke from the Fed's annual economic retreat here looms almost as large as the surrounding Grand Teton mountains that frame the meeting. Not only is the chairman’s absence a break with a 25-year tradition, but it comes at a time when markets crave the kind of clarity on the direction of monetary policy that only the head of the Fed can deliver.” http://cnb.cx/175UXQx

WHAT TO EXPECT IN JACKSON HOLE – Just what will all those bankers and foreign dignitaries and academics be up to over the next two days? The Washington Post’s Neil Irwin, on what to expect: “This next three days in Wyoming, then, will be about exploring what we know now about which of these strategies is helping and how much, what risks they’re creating in the process, and what the toolbox for central banks should look like in the years ahead.” http://wapo.st/1bYHgpz

FISHER: U.S. CAN SURVIVE TAPERING — Reuters’s Barbara Liston: “The U.S. economy can withstand a reduction in the Federal Reserve’s stimulative asset-purchase program, even though the easy-money policies have boosted U.S. manufacturers and other companies, a top central bank official said on Thursday.

“‘Personally I think the economy is strong enough to begin the process,’ Dallas Fed President Richard Fisher, one of 19 policymakers at the central bank, said of the $85-billion monthly quantitative easing program, or QE3.” http://reut.rs/186hewx

SUMMERS’ FATE IN FRESHMAN SENATOR’S HANDS? — Bloomberg columnist Al Hunt says if Elizabeth Warren (D-Mass.) — “the populist scourge of Wall Street — supports her former Harvard University colleague [Larry Summers], he probably would draw little opposition from Democrats and would likely muster enough Republican votes to win confirmation. If she opposes him, other Democrats may defect, too, and it might be a struggle to win over enough Republicans to get the 60 votes required.” http://bloom.bg/13TLY2H

MOODY’S WEIGHS BIG BANK DOWNGRADES — FT’s Stephen Foley and Tracy Alloway: “Moody’s has warned that it could cut the credit ratings of the six biggest U.S. banks, saying the federal government may be less likely to bail them out if they got into trouble in the future. Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo could be downgraded, the rating agency said on Thursday. The ratings of Bank of America and Citigroup are also under review, but with ‘direction uncertain,’ Moody’s said.” http://on.ft.com/13JX1kb

FOREIGN INVESTORS IN CHINA AIR ANTITRUST CONCERNS – FT’s Anousha Sakoui in London, James Politi in Washington and Jamil Anderlini in Beijing: “U.S. regulators and businesses have spoken out against an antitrust enforcement push by Chinese authorities as the issue emerges as a potential new friction point in relations between the world’s two largest economies. Foreign investors in China are increasingly concerned that they are being targeted in official investigations of pricing practices, such as one aimed at baby formula manufacturers earlier this year.” http://on.ft.com/16AzFeU

ALSO FOR YOUR RADAR –

IN DIVIDED EGYPT, MUBARAK RELEASED — FT’s Abeer Allam in Cairo: “Deposed president Hosni Mubarak was released from a Cairo prison on Thursday, in a symbolic move likely to further fuel political tensions in Egypt. The former dictator’s release on bail came amid a sweeping security crackdown on ousted President Mohamed Morsi’s Muslim Brotherhood, whose top leadership and mid-ranking members have been taken to the same prison where Mr. Mubarak was held.” http://on.ft.com/177eHoJ

BO XILAI REJECTS BRIBE CLAIMS — WSJ’s William Kazer: “Fallen Chinese Communist Party star Bo Xilai denied taking bribes from businessmen and said he was unaware of a French villa linked to his family, according to court transcripts, in the latest twists in China’s highest-profile trial in more than three decades.

“According to transcripts released on Thursday by the Intermediate People’s Court in Jinan, Mr. Bo denied taking 20 million yuan ($3.3 million) in bribes from Xu Ming, a businessman in the city of Dalian, where Mr. Bo was mayor in the late 1990s. ‘From the beginning, I've never admitted anything about this 20 million yuan,’ he said, adding that Mr. Xu was a friend of his wife, Gu Kailai. ‘Xu Ming was not my friend,’ he said.” http://on.wsj.com/17NvSdd

PENTAGON MAY CUT THOUSANDS OF JOBS — Bloomberg’s Tony Capaccio: “The Defense Department may have to fire at least 6,272 civilian employees if automatic cuts known as sequestration slice $52 billion from its fiscal 2014 budget, according to a Pentagon planning document. Additional budget analysis is ‘likely to produce further reductions’ as the services focus on shrinking their contract labor forces, according to a Pentagon ‘execution plan’ obtained by Bloomberg News. The job cuts, although less than 1 percent of the non-uniformed workforce, would mark an escalation from the unpaid leave mandated under sequestration in the current fiscal year.” http://bloom.bg/151bDG0

**Banks serve more low- and moderate-income customers than credit unions, which were chartered to serve people of modest means. Why should taxpayers continue to subsidize credit unions? https://twitter.com/ItsTime2Pay **